[EpochTimesOctober192021](Epoch Times reporter Li Jing comprehensive report) After party media published Xi Jinping’s article and proposed to adjust consumption tax, Chinese liquor stocks suffered “Black Monday.” As of the close, the liquor index plummeted by nearly 8%, and many stocks fell to the limit. The market value of the entire sector had evaporated by nearly 340 billion yuan. Among them, the market value of Kweichow Moutai and Wuliangye shrank by 210 billion.
As of the close of October 18, Kweichow Moutai closed at 1,800 yuan (RMB, the same below), a decrease of 6.1%, and Wuliangye closed at 215.32 yuan, a decrease of more than 8%. In just one day, the market value of Kweichow Moutai has evaporated by more than 140 billion, and the market value of Wuliangye has fallen by more than 70 billion.
In addition, many stocks, including Shede Liquor, Shanxi Fenjiu, Jiuguijiu, Yingjia Gongjiu, etc., fell by more than 9%.
As of the close of the market on the 18th, northbound funds had unilateral net sales of 8.018 billion yuan throughout the day, a new high in the past two months; among them, the net sales of Shanghai Stock Connect were 6.21 billion yuan, and the net sales of Shenzhen Stock Connect were 1.808 billion yuan.
The topic of liquor stocks plummeted that day was also on the Weibo hot search list. Some netizens posted screenshots of their holdings and commented: “It fell by 6 or 7 points in the morning, I was frightened.”
In an interview with China Times, Cai Xuefei, general manager of Zhiqu Consulting, believed that there were three main reasons for the sharp drop in liquor stocks on the 18th. “On the one hand, the consumption tax may have been raised a few days ago, and the market has a certain wait-and-see sentiment; on the other hand, Moutai led the decline. This may be related to the continuous reduction of fund holdings in the first three quarters of Moutai; the third reason may be Because the whole liquor has actually been oscillating and adjusting, this time the news superimposed and brought panic and caused the market to plummet.”
Xi Jinping issued a document to adjust consumption tax
On October 16, the Chinese Communist Party’s “Seeking Truth” magazine published an article by Xi Jinping, emphasizing the promotion of “common prosperity.” The intensity of tax adjustment in major consumption links, and the expansion of the scope of consumption tax collection.”
As early as November 29, 2019, the State Council of the Communist Party of China issued a document stating that consumption tax collection will be moved from the production stage to the wholesale and retail stage. Although the liquor industry is not mentioned, it also led the liquor sector to lead the market on that day. The news that the consumption tax will be adjusted this time came out again, and the liquor sector was also turbulent.
“Securities Times” quoted an analyst who did not want to be named as saying that consumption tax already exists, and the focus of market concerns this time is the increase in consumption tax for high-end liquor. For liquor companies with a strong voice, the tax money may be passed on to distributors. Companies that do not have a strong voice can only bear the additional taxes with their distributors.
Wine industry analyst Cai Xuefei said in an interview with Times Finance that the sharp drop in the liquor sector on the 18th should have been affected by the above-mentioned consumption tax adjustment news.
Cai Xuefei also said that the sharp drop in the liquor sector may also be related to the recent news that funds have reduced their holdings of leading liquor stocks, which has affected market confidence.
Overseas investment managers continuously reduce their holdings of liquor stocks
According to recently released position data, the world’s largest fund holding Kweichow Moutai-American Funds Europacific Growth A, a subsidiary of the Capital Group, continued to reduce Kweichow Moutai in September.
With the “slump” of Maotai stock price this year, the European Asia Pacific Growth Fund has reduced its Moutai position for two consecutive quarters, from 6,948,700 shares at the end of the first quarter to 5,823,200 shares at the end of the third quarter. Compared with the end of the second quarter, the number of shares held by the fund in Kweichow Moutai at the end of the third quarter decreased by 11.19%.
In fact, it is not only the European Asia-Pacific Growth Fund that is reducing Moutai’s holdings.
The China A Share Equity Fund (SICAV) China A Share Equity Fund, with a scale of approximately US$4 billion, reduced its holdings in Moutai by 18.53% in September.
It is not only Moutai that the Chinese funds under these overseas investment management giants have reduced their holdings.
Aberdeen Standard China A Shares Fund also reduced its holdings in Wuliangye, another liquor leader, by 8.67%. The world’s largest Chinese equity fund, Allianz China A Shares, which has a scale of nearly US$12 billion, also reduced its holdings in Wuliangye.
Kweichow Moutai received the lowest rating
A few days ago, the world’s largest index company MSCI (MSCI) updated the latest ESG rating results of A-share listed companies. In the third quarter of 2021, MSCI adjusted and announced the latest ESG ratings of 238 A-share companies.
Among them, the most concerned is the A-share blue chip representative of Kweichow Moutai, whose ESG rating has been downgraded from B to CCC, becoming the company with the lowest MSCI ESG rating among the world’s 20 largest market capitalization companies.
According to 21 Economic Net quoted Rongzheng Consulting’s ESG Director Zhang Jiulin’s analysis: “For listed companies, obtaining a higher ESG rating is a pass to be included in the MSCI ESG thematic index. A higher ESG rating means that listed companies have stable operation and standardized governance. The value of the company is recognized that it may bring better economic returns in the long-term; it also means that it will be favored by more investors and more capital injection.”
However, in the A-share market, Kweichow Moutai has taken the lead in its share price gains over the past year, and has ranked among the TOP 20 companies in the world by market capitalization. However, since it was included in the MSCI ESG rating in April 2018, it has International ESG ratings have always been at the end.
Editor in charge: Sun Yun#